A great BUILD session hosted by Mark Russinovich which gives you the internals of Windows Azure OS.
I suggest to view the HQ WMV edition of the video so you can see the screen captures and command consoles clearly
Mark Russinovich goes under the hood of Microsoft’s new cloud OS . Intended for developers that have already gotten their hands dirty with Windows Azure and understand its basic concepts, this session gives an inside look at the architectural design of Windows Azure’s compute platform. You’ll learn about Microsoft’s data center architecture, what goes on behind the scenes when you deploy and update a Windows Azure app and how it monitors and responds to the health of machines, its own components and the apps it hosts.